Author Topic: I need some help understanding this article on HSAs  (Read 622 times)

ND

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I need some help understanding this article on HSAs
« on: October 20, 2018, 08:35:11 PM »
https://www.lancasterlawblog.com/2007/02/articles/employment-law/problems-with-health-savings-accounts-hsa/

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Any scenario of accumulating money in an HSA depends upon avoiding medical expenses...

I don't understand this.  This sentence makes it sound like you're required to fund medical expenses with the HSA, rather than from a separate taxable account.

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Even though the employee gets reimbursed from the HSA for the minimum annual deductible, there is still a higher than normal maximum out of pocket deductible that may not  be reimbursable from the HSA.  The HSA’s ability to reimburse maximum out of pocket deductibles depends on whether the employee has any excess accumulation in the account.  Excess accumulations will only occur for years when the employee doesn’t have medical expenses that reach the minimum annual deductible.

"gets reimbursed" makes it sound like the process of withdrawing money is automatic.
Is this article assuming that the patient is incapable of saving for medical expenses outside of an HSA, or is there some rule about taking HSA distributions that I haven't heard about yet?  I do have an HSA, but I've never withdrawn from it (Why would I, when it's apparently a tax-free investment vehicle for medical expenses?), so I'm not yet 100% familiar with how that process works. 
« Last Edit: October 20, 2018, 08:37:52 PM by ND »

terran

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Re: I need some help understanding this article on HSAs
« Reply #1 on: October 20, 2018, 08:42:25 PM »
I didn't read the article other than the quotes, but it seems to either be misleading or just downright wrong. From your questions I would say you have a much more complete and correct understanding of HSAs than the author of that article does. I would ignore it and look for other sources if you have questions.

MDM

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Re: I need some help understanding this article on HSAs
« Reply #2 on: October 20, 2018, 10:07:53 PM »
The article is ~12 years old.  As terran noted, you are correct to question assumptions it makes.